Network Data in crisis talks with regulator

Network Data says it is in crisis talks with the Financial Services Authority and other financial services firms to get its appointed representatives writing business again.

The discussions follow a notice issued by the regulator last week that Network Data Limited is no longer allowed to carry on regulated activities.

Richard Griffiths, chief executive of Network Data Holdings, sent another email update to ARs last week saying he had met the FSA, with another meeting due to be held last Thursday.

In the email he says urgent steps are being taken to find a solution and that Network Data has also been involved in talks with a number of parties “all of whom are interested in a possible transfer”.

When the regulator issued the notice on its online register it gave ARs three days to notify clients.

One network boss says three days doesn’t allow ARs much time to contact clients and find another network.

The source says: “It is virtually impossible to do this in three days. It is obviously the regulator that is driving this, but Network Data must have had a lot of warnings before now.”

However, in the email Griffiths clarifies that ARs only need to get in touch with clients involved in an ongoing transaction.

He adds: “Obviously resolving things is our primary concern and focus and our aim is to enable you to start placing business again as quickly as possible and secure your pipeline.” Paul Sherman, mortgage proposition director at Openwork, says the network has taken on a number of Network Data’s ARs in recent weeks.

He says: “We will do whatever we can to support ARs to fast-track applications and help get them to get up and trading as soon as possible.”

There has also been speculation among ARs that a clause in their contract with Network Data could have effectively freed them from their contracts.

The contract states: “This agreement shall terminate auto-matically and without the need for notice if Network Data Limited ceases to be authorised to carry on regulated activities under the act.”

Robert Sinclair, director of the Association of Mortgage Intermediaries, advises affected ARs to find another network rather than become directly authorised as the priority is to resume business quickly.

This will also allow them to assess their situation and what their options are.

He says: “There are a number of brokers who have a range of issues with Network Data. Some are worried their commissions in the pipeline will go straight to Network Data and some are trying to redirect their trail commission for protec-tion business.

“We are advising brokers to find a way to carry on doing business as soon as possible.”